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You have registered your company. You have found the perfect, cozy spot to serve your customers. You have hired your staff. You have stocked up the shelves. You have put up the signs. And you are now open for business.

After a grueling period of working towards your business launch, the dust has finally settled. Now what? While you can still afford to sit back, and before you get fully occupied with customer-servicing, you can spend some time setting up some housekeeping procedures to set everything in motion when it comes to record-keeping.

Bank and Credit Card Statements. For small businesses, bank and credit card statements serve as the cornerstone for record-keeping. It is therefore imperative to maintain these two accounts separate from your personal account.

Corporate or business bank account

Open a separate bank account for your business. Use this for all business banking. Try to avoid using a personal account for business transactions as this practice increases the risk of items being overlooked.

Corporate or business credit card

Obtain a separate credit card to be used exclusively for your business (it can be a personal card, but different from the card you use for personal transactions). Use monthly statement as a way to keep track of expenses to be supported by slips with details of the expense (like name of the client, description of the item and so on). Slips should be filed regularly in files preferably by expense type. This will facilitate accounting based on the credit card monthly statements.

Cash transactions. All items paid for in cash are to be receipted and receipts kept. Ideally, expenses paid out-of pocket or personally should be summarized and reimbursed by the company by way of an expense report. The form should show detailed description of the expense. There should be separate envelopes or folders where items paid for in cash should be kept to facilitate accounting.

Home-office expenses. Personally paid items such as rent or home mortgage, interest, utilities, insurance, repairs, property taxes, condo fees, etc. should be tallied or at least closely estimated to allow proper calculation of business use of home/rent expense. Home office space should be calculated at the start of the business.

Vehicle usage. Car usage should be tracked to identify and collect information on all business-related trips. You should be able to calculate/estimate the business use percentage and total kilometres driven.

Vehicle-related expenses. All car expenses including loan interest, lease payment, car depreciation or capital cost allowance, gas, repairs, insurance license, CAA etc. are deductible expenses but need to be pro-rated based on the percentage of business use. It is therefore important to track all costs of car operations. Parking is generally 100% deductible.

Telephone and communication expenses. Long distance phone should be tracked to allocate claims. Separate business phone line, cellphone, internet bills are all deductible. Bills for home phone lines are not claimable.

Document-keeping. All source documents should be filed according to expense type or supplier reference to facilitate location should questions arise or if bank and credit card records are not sufficient. This need not be filed as a monthly breakdown; yearly filing is fine.

Corporate year-end. Determining fiscal year-end for corporation is flexible during the first year of operations as no pre-setting of fiscal year-end is required until the first tax returns are filed. This decision depends on profitability and the possibility that income from employment or other sources will come back into earnings in the near future.

Unincorporated entities’ year-end. For sole proprietorship, self-employed, and partnerships, it’s a calendar year-end: December 31st. If you are an eligible individual, you may be able to use an alternative method of reporting your business income that allows you to use a fiscal period other than calendar year-end, but you will have to make a reconciliation of business income for tax purposes to calculate the amount to report in your year-end personal tax return.

Corporate earnings. It makes sense to leave surplus income in the corporation. It provides an opportunity to pay lower tax rates (approximately 15.5% for income eligible for small business deduction generally up to $500,000) on the taxable income while it remains in the company’s books. Personal taxes will only be imposed and payable when funds are actually paid to the owner/s in the form of dividends and/or salary. Tax rates are so designed to ensure equitable taxation across the different business structures (corporation, sole proprietorship or partnership) so that the total corporate plus personal taxes never exceed regular personal taxes.

Incorporation versus unincorporated business structure. In deciding whether to incorporate or to remain unincorporated, from a taxation standpoint, considerations need to be made with regard to the possibility of short-term losses (which favours unincorporated structure), size of business, family ownership, income splitting, estate planning and other considerations.

Year-end preparation. By using the above suggestions, accounting and bookkeeping costs can be minimized at year-end. Organize your year-end documents as early as possible. This will give ample time to plan ahead and ensure that total corporate and personal tax burden are minimized. This will also allow the most time possible to plan for the use of taxes recoverable or to ensure that funds will be available to cover the taxes payable on due date.

Small business bookkeeping could be one of the tasks most generally avoided today in industry. The majority of entrepreneurs begin their small business companies because they have a passion for their product or service – bookkeeping is frequently seen as drudgery which must be tolerated to remain in the business. For this reason, hiring a small business bookkeeping service can be a great way of maintaining your energies concentrated on the business, leaving an expert take care of the financial details.

In bookkeeping, an accountant keeps a complete trace of how much your small business owes creditors and how much is owed to you. The accountant also traces how much you have invested in tools and inventory. In general, accounts receivable, accounts payable, bank reconciliation as well as financial statement preparation such as balance sheets, income statements, and cash flow statements are all included in small business bookkeeping.

The cost of small business bookkeeping depends on your company’s explicit needs; however, accountants typically charge a flat rate per month for basic services. The cost rises while the volume of work increases – the more transactions and statements you expect your bookkeeper to prepare, the more you will pay.

The bookkeeping rates can vary depending on your geographical sector, the size of the company, and the experience and seniority of your accountant. For the most basic bookkeeping services, you can intend to pay $500 to $1,500 per month for a skilled accountant to handle your finances.

In certain cases, the accountants will charge an hourly rate until they get a feeling for your business and how much hours is implied in the work that you wanted to be done. Following a few months, they will have clarity of your needs and you will be able to discuss a long-term flat monthly fee.

When starting out as a business owner, no doubt you considered all the aspects of owning and operating a business. One neglected area of business ownership is cash flow. Neglected that is until the business owner realizes outstanding billed invoices are not being paid in a timely manner and ongoing operations can’t be funded since the necessary cash flow is not coming in as expected. What is the solution for a new business or one that does not have enough established credit to get a line of credit from the bank?

Small business factoring is one solution that offers quick access to cash collateralized by your own accounts receivable or outstanding invoices. First. let’s consider the situation and how cash flow problems came about in the first place. Generally, invoices are sent to customers with Net 30 terms, meaning the balance of the invoice should be paid by the customer within 30 calendar days. As many business owners know, seldom do their customers pay within a 30 day time frame with many going unpaid for sixty days or more. Odds are, your customer is experiencing the same cash flow problems as you, their vendor.

So how can small business factoring be a solution for cash flow problems which plague small and mid-size business? Invoice factoring can provide much needed cash within days rather than weeks for your business. This type of business funding is simple in methodology. For example, once a business supplies goods or a service to a customer and an invoice is generated for the total amount due, rather than sending the invoice to the customer, the invoice is sent to a factoring company.

The factoring company will take the invoice and evaluate the financial worthiness of your customer and if they meet the factoring company’s guidelines, they will send you, the business owner, a check for about eighty percent of the total value of the invoice. The other twenty percent of the outstanding invoice is held in reserve until the invoice is paid in full. Once the invoice is paid, the factoring company will send you another check for the remaining twenty percent less their fee.

The small business owner receives needed cash to operate his business within a few days allowing him to continue operating unencumbered by cash flow shortfalls. The factoring company assumes the risk of collecting the outstanding invoice and collects a fee from the total amount of the invoice. Small business factoring is an excellent solution for cash flow problems affecting your bottom line.